The Modern CPA Success Show: Episode 39

Today, we are joined by Jacob Oberlander, Owner and Principal of Oberlander & Co. and Tom Wadelton CFO and Controller of Summit CPA Group to talk about how the VCFO Playbook Course helped them grow and scale their VCFO services.

Sharing important takeaways, the process in which Oberlander & Co. has applied them, and the impact it has made to their business.

Jamie Nau: Hello, and welcome to today's podcast. I'm very excited about today's guest. We have Jacob Oberlander from Oberlander & Co. Also with us is Tom Wadelton here from Summit CPA, one of our CFOs. I'm really excited about this guest because the playbook is something we haven't talked about a lot. I'm going to let Tom go into that a little bit. But we have a course that we offer for other agencies or other companies out there looking to do what we do. Other CPA firms looking to offer CFO services. So, Tom, why don't you talk about that a little bit before we let Jacob talk about his experiences and his background?

Tom Wadelton: Yeah, we have course called The Virtual CFO Playbook. I mention Playbook because it's a pretty extensive course with 15 different learning modules. There's a book that's included. There are several other elements where you can get engaged with other accounting firms. The course itself is online, virtual, at your own pace. The subtitle is How to Land $60K/ Year Clients and Provide a Killer Client Experience. You'll learn a lot of what we at Summit CPA do, and how we find clients. The average of our clients coming in is larger than that $60K/year amount. One thing I think is really cool about the course is there's lots of exercises that really try to take someone through wanting to offer VCFO services. You learn what decisions you would have to make with the intent being when you get to the end of the course, you're ready to try to offer those services. So for example, in the course, we encourage people to pick a niche of clients that they may already have or want to target that would be good for VCFO services. So our real hope, is that people come out saying, I may not be perfect at it, but I'm actually ready to try to deliver some of these services.

Jamie Nau: Great. I think for the listeners of this podcast, the course is a lot like what we talk about on this podcast, but on a way deeper level. A lot of the topics that we cover in this podcast, we cover in more detail. We cover in videos, we give handouts. We have all sorts of things that really, really complement what goes with this podcast. If you've been a listener to this podcast and listen to all the episodes, definitely something you want to look into. So Jacob, I'm going to ask you about the course a little bit later. Before we get there, I'd love to hear your background and kind of where you came from and what got you into accounting, and then what made you think about the VCFO offerings?

Jacob Oberlander: Yeah hi, thanks so much for having me. So I was accountant probably since the day I remember, I have probably written my expenses since the age of 15. So I always knew I wanted to be an accountant. It was my first passion. After graduating I worked for different firms over five years or so. Now we have our own firm, Oberlander & Co. and have been around for the past seven years. We're a staff of seven. So I always had a big passion for accounting. I know especially in the old days, traditional legacy accounting firms are focused pretty much on tax service. I always felt their businesses needed much more than accounting, right? The tax is just a small part of it, so there's so much more to it. That's what I am always trying to do. At that point, I did not call what we were doing being a virtual CFO. I didn't have the name for it, but I always knew that this is something that I'm looking for that I want to expand on. So fast forward to probably approximately two years ago, we started offering what we now called virtual CFO services. We started dabbling in clients. At that time, I would be searching online and I found a few courses offering virtual CFO. But I felt that Summit is way, way superior because it's an existing firm. It's not just a course that you buy online. I feel like I'm working with a team. I almost feel like, and for those who don't know Jamie, Tom, Adam and Jody, it's almost like we're all colleagues. So, you know, it's like a real firm and we work together and they help us a lot besides actually just taking the course. So we learn a lot from them. So that has helped us a lot in setting our framework. One of the things that we accomplished is setting a framework on how to offer virtual CFO services. I know you talk a lot about cadence for accounting firms; how to structure, how to offer weekly meetings. So it's very defined. And so we have an org chart. We know the team leader is the senior CFO, the senior accounting. So it's very nice. It's a very nice process, and it's really something that we're expanding and is really valuable for us and especially for our clients, our client. The biggest reward for us is when our clients see that and they look at the charts and they're amazed by it.

Jamie Nau: So tell us about that first client you took on in this in this space. What made you go down that path? And then also when you were down that path, what type of things were you doing for them that were different than you were doing before?

Jacob Oberlander: So our first client at that time we didn't define what's included and what's not. And what happened is we were trying to offer them everything, which is a mistake, because you can't be everything to the. It's impossible. So you want to be very nice. Help them as much as you can. But we were offering them too much. What we started being clear on what we offered exactly. We have the month end close, we're doing projections, which is a big part. We have the pipeline meetings and then we add on other based on the specific needs of our clients. We have additional, for example, we have an economist that we do inventory meeting, so we go into it. So not an extra meeting. I know it's on the model, how to frame that, how to set that up. What Summit helped us with is this framework for when we engage a new client they know and we know exactly what they're getting.

Tom Wadelton: So I'm curious, you said we offered too much. If you think back to the beginning and help other people learn from some of your mistakes, are there certain things that come to mind that you thought you could offer to clients that you've been going back to and saying okay, that was probably more than what we should have offered?

Jacob Oberlander: The main thing that I would say is we are as a virtual CFO, if you work a lot with clients, you are their consultant. This is what happens. You grow into the business, but within the framework of virtual CFO on projection. For example, Clients would start asking me, can you help me who should design my website? So that is out of scope. You know, again I'm friends with my clients. I can help them if I want. But you have to set the mindset of a client as okay. We are your virtual CFO. Obviously, we will be involved. We will get to the point where we help you with sales. For example, we have the pipeline meetings for the clients. So that really helps a client with sales, and we met with the salespeople. So we have that. This week actually we had a meeting with a client where they felt they want to have the sales leader in you know, just to help understand. We have the dashboards we use in Reach Reporting. But putting in the framework, it's not consulting on everything. So that's one example.

Tom Wadelton: That's a really good example

Jamie Nau: Yeah Tom I am going to throw that question on you too, because it's something that we at Summit struggle with as well. Right now I'm looking to hire a couple of CFOs in-house. One of my biggest things is, when a new CFO comes in, they're going to start with four clients because I can't give them a full book. So when you're only dealing with four or five clients it's really easy to do everything they ask. Even down to the, like you said, help with a website. So it's not only a problem you have early on when starting this, it's also every time you bring in a new CFO. So Tom can you kind of talk about some of your experiences in that area as well?

Tom Wadelton: I can, and it's a constant thing. So setting the boundaries with clients becomes really important to do and it's a pretty ongoing thing. I'll admit at the beginning, I wasn't good at setting them. I get really frustrated clients feeling like they knew they were pushing the bounds of what we had offered and going beyond them. I think I've realized oftentimes they're not even sure where those boundaries are. Jacob, you mentioned this. You do a pipeline meeting and they say, could we have maybe one of these once per week? Because this is really helpful to do. That could be an example. Time is the biggest or the most precious commodity where I just don't have that time built into our piece. If you have CFO services, you get four to six meetings a month. That's kind of the usual, and one extra meeting here. But if the clients wants three more meetings a month, we would have a conversation where we say yes, we can. We're going to charge you more. Let's go and add three more meetings and here's the additional cost. You still want us to do it? Some say yes and others say no. Maybe we can get by doing something different. The other thing is probably more operational kind of things, maybe getting into some collections where they have people who are not paying on time. We'll send out some initial messages, but if it comes into ongoing phone calls that are more account management kind of stuff, the same kind of conversation that happens is, hey, it's going to get to a point where your relationship makes it work better. That's the most important thing. But also, you're paying us for fairly simple invoicing and us doing all of your collections is not in there. My finding is most clients are very reasonable in doing that. But it's also important, I think, to have that conversation early. So you don't find yourself, Jacob, in your example, saying, sure, you know, let's go out and meet every single week. Then after three months, you no longer have time because you have more clients. Then going back and saying, I can't do it any longer, you will probably have a tougher conversation. Your client is reasonably saying, you did it for a while, and now you're coming back and saying it's not working.

Jamie Nau: I think the big thing is it's all about building the structure and giving your people the tools to make those decisions and have those conversations. I remember the first client I had five years ago. I was doing everything for him. And then, you know, I go into kind of my second onboarding and I'm doing the same thing for my second client. Then eventually I'm like, wow, I have to do this for 15 clients. There's no way I'm ever going to get anything done. So one of the things I added was a review of the contract and the onboarding. Gong through the contract with the client. Talking through the terms and what I am going to go do and not do, and this is what you guys are doing. So just so you know, when we say we're doing AR, what that means is we'll send your invoices. If you want anything more than that, we're going to need to go back and renegotiate. So basically, on day one in meeting with the client I'm saying, yeah, Jody is an awesome salesman. He's amazing. He knows exactly what you guys are looking for. But this is how I understood that sales call. Is that right? Are we on the same page here? Not to say that was the greatest thing since sliced bread because we've done like 70 things like that, you know, but it is important to learn as you go and to see what are the things that we're doing along the way that that help us be better, be more efficient and help us scale, because that's all you want to do. I know Jacob, you're an awesome CFO and you're getting better at it, but eventually you're going to want to add some more CFOs. When you have to move that to someone else, that's when it gets more difficult. So can you talk about some of those learning moments you've had already? I know you said you have only been doing this for a couple of years. Can you give an example of maybe one or two things you've changed those two years since you've been doing this?

Jacob Oberlander: One is we started doing forecasting projections. We never had a structure. We do the forecasting, we plan out for the year and then we revise them on a monthly projection and we do the comparison, the actuals versus projection. The forecast, that framework helped us a lot. I think the client, liked it a lot. They can see the original plan, the modifications and the actuals, so that part is something that the client really, really feels as useful. The other thing that I want to discuss that I feel is the real value in helping me is with the pricing structure. How to charge the clients, because at the end of the day, you know, we're getting very close with the clients and we want to do whatever we can. But we done want to leave money on the table. So not feeling guilty, charging them. You know, in the title of the course you put $60K, something like that. So we realized by us having the liberty of charging worth our value, we can offer more services. It allows us to offer more services to hire more people. We were undercutting our prices and it wasn't feasible. It has to make sense for everyone, in order for us to help the clients.

Tom Wadelton: I think that's a great example that you gave. I'm curious how, so in the course it talks about value based pricing. Does that help when you look at the price and say it's a big price to think in terms of offering it in value, where at least I would say there are times with our clients where we're comparing that maybe to an existing resource that they have doing that kind of work. Or they might be comparing it to if I tried to hire a full time CFO, I'd be caught in this $150K/year range and we're offering similar services. Did that part of it help with the pricing or not?

Jacob Oberlander: Definitely. So that concept, explaining that we're not an upgrade of your existing accountant, we're actually, you're getting a discount from hiring a full time in-house CFO, which you said $150K/year. I'm in New York. I think it's even more expensive than that. So what we are saying is instead of having the full time in-house CFO, we're coming in once a week virtually. You're setting the tone from the top down, the client will understand that. One more thing about pricing. I know it's very popular now. People say value pricing, but most accountants do fix pricing. They don't value pricing. They do fix pricing. So it's not really value pricing. But the Summit CPA model, it's really based on value. I always followed Ron Baker and, you know, all these value pricing. But it wasn't really and I think sometimes even more advanced than that, because now we are into subscription pricing. It's multi subscription. There's no contract. We follow the same model. We tell the clients you pay the first two months double after that, it's month to month, you know, week to week, whatever. It's a subscription to our service and it's really based on the value and we're putting ourselves out there to show them we deliver and we know we charge them a lot and we are eager to deliver them.

Jamie Nau: I love the idea of pricing, especially for us as a CPA firm. I think that the example you gave is giving it to a client is good, but I think for any of our listeners, I think it helps me as a CPA if I was my own firm. When I when I first came to Summit, I was thinking about starting my own thing as well. I can tell you the price I had written on paper were a lot cheaper than what Summit was offering, because I think that having that same value conversation with Jody had made a ton of sense, as an employee but also in our pricing model, because it just it gives me that permission like why can't we charge $65K. We know what it costs. We know what it cost to hire you, Jacob. We know what it costs to hire Tom. So it helps give permission to do it. Then you're surprised at how often people accept it, right? Like, at first I was like, man, when I was as I said, I was trying to build my model at like twelve thousand dollars a year. If I can get this number of clients, I could make this much. But then you see what we recommend. There really is a market out there for it.

Jacob Oberlander: Yep, there's definitely need for it. We just had this week a client, a startup company, and we're talking about projection and they were so happy. They're like, are you kidding me? It took me ten weeks, I did it myself last time. It took me ten weeks to get a projection for investors. Not only are we giving them the numbers, we're giving them in a professional deck so that it's ready to present to investors. That's a huge value to clients.

Tom Wadelton: That's a great example of value. How much that is worth to the funding. They might get quicker funding because of that.

Jamie Nau: I know I made this joke before in the podcast, but one of the times, once my kids realized what I actually do, they're like, wait a second. The only reason you make money is because of what you think and what you say? That makes no sense to my kids. But the best value we give is just being on the other side of the line when they have a question, when they want to talk to someone. So I'd love to hear a little bit about that, Jacob, and some of the relationships you developed with your clients over these two years and kind of some of the fun conversations you've had, because I think that's the best part of being a VCFO is really learning about the companies and having those fun conversations.

Jacob Oberlander: Yeah, definitely. This is a story we had last month. The client went way over budget, they did a company trip. So I ask the boss, you have to think long and hard. Are you in the business of making money or are you in the business of going on vacation and using your business as an excuse? They had spent a lavish amount on a company outing. But that's stuff that you find when you do the budget. They actually did plan for it, to do an annual retreat for the company. But it was way, way out of range. But yeah. But with forecasting, that's having to forecast and having the financial meeting, it's a lot of fun because it's not only that we utilize we didn't touch on that aspect of utilizing technology the way we did it together. The reporting dashboard that we're using helps combining from different sources. We can often connect to our clients, get a lot of resources from their backend. So it's not just financial, it's not just financial like, you know, revenue line.

Tom Wadelton: That’s a really good example, I bet you would find sometimes delivering that sort of hard message to the client. It's exactly what they want. I had one at one point. It was a fairly new client, but I thought the leadership team was too relaxed about a really poor pipeline of work and too big of a team. So I basically told him that in pretty stark terms. The CEO said that was really hard to hear. But that's exactly why we brought you in, because I don't think we were realizing how big this problem was. I was a little bit anxious telling him, just thinking they might say hey, you're the new guy. What are you doing, telling us what to do? I'm curious how your client reacted when you asked him that question? Are you trying to make money or go on vacation

Jacob Oberlander: They took it. The same thing, you know, people are responsible. I think his comment is that's exactly why we hired you. That's like I think that's what he said. They really want us. They want that knowledge. I know Summit is completely virtual. We still have some clients coming in. And that client was like, can we skip this? We knew we would rather have a short meeting than no meeting. We pushed them to Zoom. But it was important to get with the CEO and it's important to get that reality check. Sometimes depending on the size, a bigger company, the CEO is usually not involved in the nitty gritty stuff. But if they join the financial statement meeting we can discuss those issues.

Jamie Nau: Here's my favorite part about the way you worded that is you asked as a question. For me, one of the secrets of being a good CFO is, he may have answered that as heck yeah, I'm using my business to pay for vacations. I think it's good for you to know that. Ultimately you need to know what your client's motives are. There are business owners out there that are like yeah, I love to take vacations, so I'm going to run into my business. I'm going to make it with my friends who are my employees and we're going to take for vacations a year. Ultimately, you really should understand the motives. There are some owners whose motive is to sell a company in three years for ten million dollars. Then there's some owners that are like, I want to create as many jobs in my city as possible. I think the way you ask that question as opposed to just like, you know, throwing it at them, I love the way you worded that. I think that is key in building those relationships.

Tom Wadelton: Jacob, when you took the course, scaling is one of the big things, right? I mean, how does it get out of the hands to where you have to be the CEO for every single person you can rely on other people doing it. Any particular things in the course I'm thinking of maybe some of the processes or tools that were discussed that helped you think about I have a better idea of how I might scale this and end up having three, four or five CFOs and a group of clients that you wouldn't be able to handle personally?

Jacob Oberlander: Yeah, I think for me, what I learned is structure. So the org chart. I know Jamie, you're the accounting director. You know, I think that helped us. We're a small firm. We're not the size of Summit. We have a seven person firm. But after doing the course, what we did is I set up an org chart. I know we discussed core values, but we have not set up that framework yet. I sat down with everyone in the office and we give them new titles. So we have the senior accountant now. Setting that structure is helping. For me, my long term goal is not to be the CFO. We do have someone in office who is serving as a virtual CFO right now because I'm the leader. I'm the team leader. When we talk to client I tell them I'm the leader. I wouldn't call it the accounting director. I'm the leader. The buck stops with me. We have the senior CFO, we have the senior accountant and we have myself on every meeting.

Jamie Nau: I think the next step, I'm not sure you have gotten this far, but I think the next step would be setting up that structure for different milestones as well. Right now you're in a role similar to me. At what point would you step into like an operations role and you hire a director? At what point do you need that second CFO or do you need that third CFO? I think that's the next step. Really scaling and saying when we had X million in sales or when we hit X number of clients or what does that indicate a view of when you actually need to kind of hit those milestones and it helps you plan ahead because then you're like, well, now we're you know, we're still a million dollars away from that and we're still, you know, twenty, twenty clients away from that or whatever. And then it's going to happen before, you know, like, okay, here we are and you're going to start struggling. I'm like, oh man, this is a lot tougher to manage than I thought. You're going to have to be reactive instead of proactive. So it’s really important to lay out that plan.

Tom Wadelton: That is a really big part of your job still isn't, Jamie? What's the right number? I know another big part of Jamie's job is then looking for are there ways we could be more efficient? So what's the best team structure for the existing work? So it can be both. I can get more clients with our current structure if we do certain things, automation, things like that. But then also what's the right number of people? So you're not just reacting.

Jamie Nau: Yeah, that's a big part of what I do. That's what I was working on today. I'm an accountant so trying to put math behind it. Like right now we still we don't exactly hire by gut, but we have some numbers in place where with this much capacity is when I need to hire that next CFO and I need to hire that next accountant. And, you know, I'm trying to, you know, systemize that as well. So it makes that part easier so when we are there I can point to this is what we're hiring and this is when we need to start interviewing. Just putting some process behind that. We do a process around it but I'm always revaluing those processes. So we're getting close on time here. I wanted to throw our email address out. We love having guests like Jacob on the show. We love hearing your questions. We want to make sure we keep the topics fresh. So our email address is: vcfo@summitcpa.net. we'd love to hear from you. So before we end the show, any final thoughts? I'll start with you, Jacob. Any final thoughts?

Jacob Oberlander: Yeah, I think accountants have a big challenge of undercutting the prices. When we started the course, I always felt that I can’t charge as much. In reality I didn't know if I would find clients that would be looking for a virtual CFO, but in reality it was the other way around. The demand is so high. It is challenging to find the right virtual CFO. So we have more demand for the services than capacity that we can handle. So if people understood that they would know there's a real value to it. There aren't that many accountant offering that so it has a real value to it. And the people who are following the virtual CFO path should know that.

Jamie Nau: That's a great point, Jacob. It's funny I talked to you. I've been doing a bunch of interviews this week, and that's one of the things I always tell people is our growth is not limited by customers. Our growth is limited by people. You know, I mean, if I could find 20 great VCFOs and space them out over time, I could probably add 10 new clients a month. So we're more limited by our growth by our people and by our processes, than potential customers out there. So that is a great point. What about you, Tom? Final thoughts for the listeners?

Tom Wadelton: I think my final thought would be is I think accountants ,and I'm included in this, we like to sit and analyze a lot before we act. I'm afraid that there's a feeling of I really have to have it perfect from pricing to deliver everything to take that first step. I know from working here, I think we do a lot of things right. We also make mistakes and then pivot and say, let's change. That would be my encouragement for someone thinking about this. Take the course, it'll give you great information. But have in your mind I'm going to be talking to my existing clients within two months of finishing the course and opening this up. And I'm going to start this and I'm going to learn a lot. Maybe I am pivoting to a client and saying, hey, I know I gave you this pricing. It's different than what it needs to be. Let's make modifications, let's change and do that. That probably the biggest thing I think. people need to take the risk and go ahead, get started because they're going to find it's probably not as hard as they think and they'll learn so much.

Jamie Nau: Yeah, that's another great point. I appreciate having you guys both on the show. I think a lot of people will listen to this, and like Tom said don’t be afraid to just try. Don't be afraid to make mistakes. I mean, we could do a whole course on all the mistakes we made. In fact, I think we did. So, thank you, guys.